Surprise Medical Bills And Balance Billing
Check out the second post in our three-part series about Surprise Medical Bills and Balance Billing where we take a closer look at the problem and start to explore the solutions.
Ed Marasco, MPM, CMTE, EMT-P (Ret.) is Vice President of Business Development at Quick Med Claims and a respected leader in the medical transportation industry. Ed has extensive experience in the areas of medical transportation billing and reimbursement policy gleaned from years as an air medical EMT-P and his time at QMC. He has served on several national committees and recently participated in the Negotiated Rulemaking Process to develop the current Medicare Ambulance Fee Schedule.
Part 2: Treating the Disease
In Part 1, we established that Surprise Medical and Balance Billing may look like a simple problem on the surface when in fact there are a lot of complex issues that factor into it when examined closely. The bills are merely a manifestation of the underlying disease that has been around for years without an effective treatment plan. As the problem lingered, healthcare experts have tried a number of different treatment strategies – none of which offer resolution to the problem.
Put a Band-aid on It
Let’s explore some of the solutions that have been attempted by the industry over the years.
The Free Market Solution
Competition is the basis for most of the operations and financing norms that govern the relationships between providers, employers, patients, and insurers across many aspects of the US Healthcare System. If all parties were equally committed to the Institute for Healthcare Improvement’s (IHI) Triple Aim of (1) driving population health, (2) improving the patient experience of care (quality and satisfaction) and (3) reducing the per capita cost of healthcare, the free-market approach could be a valid solution. However, the US Healthcare System’s operations and finance factions have not embraced these principles, even for the most basic delivery of care. For emergency services delivery, the application of free-market norms has been even more ineffective.
The Regulatory Solution
Local, regional and state regulatory agencies have also attempted to align the interests of patients, employers, and payors with the providers of care by augmenting the free-market approach with regulatory requirements. Unfortunately, the number of regulations on the books across innumerable municipalities has made it a highly ineffective approach. For example, the Airline Deregulation Act of 1978 (ADA) stands prohibits interested parties from reaching a regulatory solution as it bans government entities from controlling rates, routes and structures for commercial aviation operations. In effect, the ADA drives the solution back to the free market realm where it started.
The Legislative Solution
Federal legislation offers a better solution than the regulatory route because it is at least a larger forum wherein an industry-wide solution can be developed. There are many constituencies that believe the only way to effectively treat the disease is through government intervention.
The drawback is … well, we’ve all seen CSPAN. Just as providers, patients, and payors haven’t been able to agree on a solution, policymakers in Washington have been equally challenged to find a legislative solution that will treat the disease without any unintended adverse side effects.
Legislative Attempts
In June 2019, the Senate Health, Education, Labor and Pensions (HELP) Committee approved a package of bills targeted at lowering the cost of medical care, including a plan to end surprise medical bills. The House Energy and Commerce Committee has also taken up the issue.
While the legislation is not specifically focused on compelling providers to obtain in-network status for billing purposes, it does seek to limit to patient responsibility beyond the in-network fee schedule. The expectation is that providers and payors will have to agree on rates in a manner that will eliminate surprises for the patient. Likewise, it is anticipated that the out-of-pocket responsibility would be based on the payment level (versus the charge level) as is the case with the Medicare Fee Schedule.
The Political Rub
Network Matching – A network matching provision would require facility-based providers to contract with every plan for which the hospital has a contract with the goal of alleviating confusion for the patient. This requirement may also include medical transport providers at some point.
There are some regulatory complications with this approach in that some states have Corporate Practice of Medical Laws with provisions that actually preclude the employment of physicians for the EXPRESS PURPOSE OF AVOIDING SUCH COLLUSION. These laws do fly in the face of network development, although they are part of the current regulatory landscape. Pursing network matching for medical transport providers could also be complicated by these types of regulations.
Reimbursement Benchmark – One of the key elements of existing drafts of the legislation uses 125% of the Medicare Rates as a benchmark. Hospitals and transport entities alike agree that the Medicare reimbursement system for ambulance services is flawed, which was confirmed in a MediPAC study releases a couple of years ago. The shortfall of the current Medicare Ambulance Fee Schedule to meet the needs of medical transport providers makes using it as the benchmark a point that requires a great deal of scrutiny before it could be adopted with any confidence by the industry.
Dispute Resolution – Another proposed approach involves using regional rates or the “median rate for all network charges” to establish minimum reimbursement levels. One of the challenges to this option is that there is not a standard approach to setting charges across the country, making established protocols for resolving disputes among the key players absolutely vital.
Providers have proposed a “baseball-style” arbitration process whereby the parties would submit their desired reimbursement and payment amount for review by a third party which would then set the rate for a defined period of time. Alternatively, some proposals call for a negotiated rulemaking process to resolve the issue like the one that just like the process uses to establish the current Medicare Fee Schedule, which would take years to develop.
Summary
Clearly the underlying issue that has resulted in Surprise Medical Bills and Balance Billing is a complex one that is difficult to build meaningful consensus around – whether in the industry or the halls of Congress.
Tune in next week when we’ll delve into a two-pronged palliative and curative treatment plan for this important issue.
